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FEDERAL RECEIPTS

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11. GOVERNMENTAL RECEIPTS

A simpler, fairer, and more efficient tax system is critical to growing the economy and creating jobs. The en-actment of the Tax Cuts and Jobs Act (Public Law 115–97) in 2017 reformed the Nation’s outdated, overly complex, and burdensome tax system to unleash America’s econ-omy, and create millions of new, better-paying jobs that enable American workers to meet their families’ needs. This Act, which is the first comprehensive tax reform in

a generation, streamlines the tax system and ends spe-cial interest tax breaks and loopholes, ensuring that all Americans will be treated fairly by the tax system, not just the wealthy. This chapter presents the Budget’s es-timates of taxes and governmental receipts including the effects of the Act and other tax legislation enacted in 2017, discusses the provisions of those enacted laws, and ex-plains the Administration’s additional receipt proposals.

ESTIMATES OF GOVERNMENTAL RECEIPTS

Governmental receipts are taxes and other collections from the public that result from the exercise of the Federal Government’s sovereign or governmental powers. The dif-ference between governmental receipts and outlays is the surplus or deficit.

The Federal Government also collects income from the public from market-oriented activities. Collections from these activities are subtracted from gross outlays, rather than added to taxes and other governmental receipts, and are discussed in Chapter 12, “Offsetting Collections and Offsetting Receipts,” in this volume.

Total governmental receipts (hereafter referred to as “receipts”) are estimated to be $3,340.4 billion in 2018, an increase of $24.2 billion or 0.7 percent from 2017. The estimated increase in 2018 is largely due to increases in individual income taxes and excise taxes, partially offset

by decreases in taxes on corporate income. Receipts in 2018 are estimated to be 16.7 percent of Gross Domestic Product (GDP), which is lower than in 2017, when re-ceipts were 17.3 percent of GDP.

Receipts are estimated to rise to $3,422.3 billion in 2019, an increase of $81.9 billion or 2.5 percent relative to 2018. Receipts are projected to grow at an average an-nual rate of 6.4 percent between 2019 and 2023, rising to $4,386.1 billion. Receipts are projected to rise to $5,817.5 billion in 2028, growing at an average annual rate of 5.8 percent between 2023 and 2028. This growth is largely due to assumed increases in incomes resulting from both real economic growth and inflation.

As a share of GDP, receipts are projected to decrease from 16.7 percent in 2018 to 16.3 percent in 2019, and to steadily increase to 17.8 percent of GDP by 2028.

2017 Actual

Estimate

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Individual income taxes �� 1,587�1 1,660�1 1,687�7 1,790�6 1,918�7 2,052�9 2,201�7 2,353�1 2,510�6 2,707�0 2,890�2 3,069�7Corporation income taxes �� 297�0 217�6 225�3 264�8 272�7 314�2 373�8 416�6 434�7 417�4 406�0 413�5Social insurance and retirement receipts �� 1,161�9 1,169�7 1,237�6 1,288�5 1,362�8 1,439�0 1,513�7 1,596�3 1,680�7 1,774�1 1,863�4 1,974�7

(On-budget) �� (311�3) (317�4) (332�4) (347�1) (368�4) (390�1) (411�2) (432�2) (454�7) (478�3) (502�5) (533�0)(Off-budget) �� (850�6) (852�3) (905�2) (941�4) (994�4) (1,048�9) (1,102�6) (1,164�1) (1,226�1) (1,295�8) (1,360�9) (1,441�7)

Excise taxes �� 83�8 108�2 108�4 112�4 118�9 106�3 108�7 111�3 114�2 117�4 121�2 125�5Estate and gift taxes �� 22�8 24�7 16�8 18�0 19�4 20�7 22�8 24�4 26�1 27�6 29�1 30�9Customs duties �� 34�6 40�4 43�9 46�7 47�8 49�6 50�6 51�5 52�7 54�2 56�0 58�0Miscellaneous receipts �� 129�0 119�7 106�0 96�4 100�3 108�8 117�7 125�2 130�5 136�8 143�4 149�3Allowance for repeal and replacement of

Obamacare �� –3�5 –8�6 –2�5 –2�8 –2�9 –3�0 –3�2 –3�5 –3�7 –4�1Total, receipts ......................................... 3,316.2 3,340.4 3,422.3 3,608.9 3,838.2 4,088.7 4,386.1 4,675.5 4,946.3 5,231.1 5,505.6 5,817.5

(On-budget) �� (2,465�6) (2,488�1) (2,517�1) (2,667�6) (2,843�8) (3,039�8) (3,283�6) (3,511�4) (3,720�2) (3,935�3) (4,144�7) (4,375�8)(Off-budget) �� (850�6) (852�3) (905�2) (941�4) (994�4) (1,048�9) (1,102�6) (1,164�1) (1,226�1) (1,295�8) (1,360�9) (1,441�7)

Total receipts as a percentage of GDP �� 17�3 16�7 16�3 16�4 16�5 16�8 17�1 17�4 17�5 17�6 17�7 17�8

Table 11–1. RECEIPTS BY SOURCE—SUMMARY(In billions of dollars)

128 ANALYTICAL PERSPECTIVES

LEGISLATION ENACTED IN 2017 THAT AFFECTS GOVERNMENTAL RECEIPTS

In addition to the Tax Cuts and Jobs Act, two other laws were enacted during 2017 that affect receipts. The major provisions of these laws that have a significant im-pact on receipts are described below.1

DISASTER TAX RELIEF AND AIRPORT AND AIRWAY EXTENSION ACT

OF 2017 (Public Law 115–63)

This Act, which was signed into law on September 29, 2017, extended through March 31, 2018, various expiring authorities, programs, and activities of the Federal Aviation Administration in the Department of Transportation, including aviation-related taxes. The Act also modified certain tax provisions for individuals liv-ing in areas impacted by Hurricanes Harvey, Irma, and Maria, and tax provisions regarding charitable giving to those areas.

Extend aviation taxes.—The Internal Revenue Code imposes certain aviation-related taxes, including taxes on aviation fuels and ticket taxes on transportation by air of persons and property; and transfers to the Airport and Airway Trust Fund amounts equivalent to the aviation fuel taxes and air transportation ticket taxes received in the Treasury. The Act extended these taxes at their cur-rent rates, and extended the exemption under current law on commercial aviation taxes for certain fractional air-craft program flights, both through March 31, 2018.

Impose special disaster-related rules for use of retirement funds.—The Act permits penalty-free withdrawals from eligible retirement plans for individu-als whose principal place of abode was located in the Hurricane Harvey, Irma, or Maria disaster areas on the date of disaster and who sustained an economic loss by reason of the hurricane. Individuals can make withdraw-als from eligible retirement plans limited to $100,000 over the aggregate amounts treated as qualified hurricane dis-tributions for that individual in all prior taxable years. In addition, individuals who make withdrawals for qualified hurricane relief can, within a three-year period starting on the date of the withdrawal, make contributions back to an eligible retirement plan, not to exceed the amount withdrawn. To qualify, these distributions must be made on or after August 23, 2017, for Hurricane Harvey indi-viduals (September 1, 2017, and September 16, 2017, for Hurricanes Irma and Maria individuals respectively) and before January 1, 2019.

Provide tax credit for disaster-related employ-ment.—The Act allows certain employers who were in business in a Hurricane Harvey, Irma, or Maria disaster zone on the date of the disaster, and before January 1, 2018, whose business is inoperable, to take a tax credit for 40 percent (up to $6,000 per employee) of wages paid dur-ing that period to each employee whose principal place of employment with the employer was in a disaster zone.

1 In the discussions of enacted legislation, years referred to are calen-dar years, unless otherwise noted.

Temporarily suspend limitations on charitable contributions.—Under current law, individuals and corporations can take itemized deductions for charitable contributions, subject to certain limitations. Individuals may deduct charitable contributions up to 50 percent of adjusted gross income (AGI), further limited by the phase-out of itemized deductions. For corporations, the total deductions for charitable contributions for any tax-able year may not exceed 10 percent of a corporation’s taxable income. Under the Act, these limitations do not apply to corporate contributions for relief efforts related to Hurricane Harvey, Irma, or Maria, or to any charitable contributions paid by individuals during the period be-ginning on the date of disaster, and ending on December 31, 2017.

Implement special rules for qualified disaster-re-lated personal casualty losses.—Currently, individual taxpayers are generally allowed to deduct from income any loss sustained during the taxable year and not compensated for by insurance or otherwise. Losses of non-business property may be deducted if they arise from casualty (e.g., fire or storm) or theft. However, these loss-es are allowed only to the extent that the loss from each casualty or theft exceeds $100. In addition, aggregate net losses from casualties or theft are deductible only to the extent that they exceed 10 percent of an individual taxpayer’s AGI. This Act eliminated the 10 percent limi-tation for losses arising in the Hurricane Harvey, Irma, or Maria disaster areas and attributable to the hurricane; raised the $100 personal loss threshold to $500; and elim-inated the requirement that individuals must itemize deductions in order to access the personal casualty loss deduction.

Special rule for determining earned income.—Under current law, eligible taxpayers may receive an earned income tax credit (EITC) and child credits. The EITC is a refundable credit for low-income workers. Taxpayers may claim a refundable child credit of $1,000 for each qualifying child if their AGI is below $75,000 for single filers and $110,000 if married and filing jointly. The Act allows these credits to be determined, at the elec-tion of the taxpayer, by substituting the earned income for 2016 for the earned income for 2017. This provision only applies to individuals whose principal place of abode was located, on the date of the disaster, in a Hurricane Harvey, Irma, or Maria disaster zone; or Hurricane Harvey, Irma, or Maria disaster area (but outside the disaster zone) and was displaced due to the hurricane.

TSP MODERNIZATION ACT OF 2017 (Public Law 115–84)

This Act, which was signed into law on November 17, 2017, modifies the rules relating to withdrawals from the Thrift Saving Plan (TSP) accounts of former Federal employees and Members of Congress. Previously, such employees and Members could make only one partial withdrawal upon reaching age 59–1/2 while employed or

11. GOVERNMENTAL RECEIPTS 129

one such withdrawal after retirement. The Act permits an unlimited number of withdrawals. The Act also elimi-nates the withdrawal election deadline and the limitation on age-based in-service withdrawals.

AN ACT TO PROVIDE FOR RECONCILIATION PURSUANT TO TITLES II AND V OF THE

CONCURRENT RESOLUTION ON THE BUDGET FOR FISCAL YEAR 2018 (Public Law 115–97)

This Act, also referred to as the Tax Cuts and Jobs Act, which was signed into law on December 22, 2017, provided comprehensive tax reform for individuals and corporations, and repealed the individual mandate under the Affordable Care Act. Significant provisions of this Act are described in greater detail below.

Individual tax reform

Consolidate, simplify, and temporarily reduce in-come tax rates for individuals.—This Act temporarily reduced the individual income tax rates and altered the threshold at which each of the tax rates apply, effective for taxable years beginning after December 31, 2017, and before January 1, 2026. The individual tax rates were reduced to 10 percent, 12 percent, 22 percent, 24 percent, 32 percent, 35 percent, and 37 percent, with the highest rate applying to taxable income over $600,000 for mar-ried individuals filing jointly and over $500,000 for single individuals.

Index tax brackets by the chained Consumer Price Index (CPI).—Under prior law, the individual income tax brackets and many other thresholds within the tax code were indexed for inflation using the CPI for all urban consumers, as produced by the Bureau of Labor Statistics (BLS) within the Department of Commerce. This Act re-vised these indexation provisions to use the chained CPI, an alternative measure of inflation produced by BLS that more accurately measures inflation by better capturing the effects of changes in purchasing patterns on consumer price inflation.

Consolidate and temporarily reduce income tax rates for estates and trusts.—The Act modified the income tax rates for estates and trusts to 10 percent on taxable income below $2,550; 24 percent on taxable in-come over $2,550 but below $9,150; 35 percent on taxable income over $9,150 but below $12,500; and 37 percent on taxable income over $12,500. The reduced rates apply to taxable years beginning after December 31, 2017, and be-fore January 1, 2026.

Increase the standard deduction.—Individuals who do not elect to itemize deductions may reduce their AGI by the amount of the applicable standard deduction in arriving at their taxable income. The basic standard deduction varies depending upon a taxpayer’s filing sta-tus. This Act increased the basic standard deduction for individuals in 2018 to be $12,000 for single individuals (from $6,350 in 2017) and $24,000 for married individ-uals filing a joint return (from $12,700 in 2017). These amounts are indexed for inflation. The increase applies

to taxable years beginning after December 31, 2017, and before January 1, 2026.

Repeal the deduction for personal exemptions.—In determining taxable income, individuals reduce AGI by any personal exemption deductions and either the applica-ble standard deduction or his or her itemized deductions. Personal exemptions generally are allowed for taxpayers, their spouses, and any dependents. The deduction for the personal exemption is phased out for taxpayers with AGI in excess of $313,800 for married individuals filing jointly and $261,500 for single individuals. The Act repealed the deduction for personal exemptions for tax years beginning after December 31, 2017, through December 31, 2025.

Double the exemption amount for the estate and gift tax.—The Act unified the estate and gift taxes such that a single graduated rate schedule applies to cumula-tive taxable transfers made by a taxpayer during his or her lifetime and at death. Additionally, in determining one’s taxable estate, certain credits are subtracted to de-termine estate tax liability; the Act doubled the exclusions for estate and gift taxes by increasing the basic exclusion amount from $5 million to $10 million, indexed for infla-tion occurring after 2011, for tax years beginning after December 31, 2017, through December 31, 2025.

Increase the child tax credit and require valid Social Security number (SSN).—The Act increased the child tax credit from $1,000 to $2,000 per qualifying child, provided $500 for each dependent who does not qualify for the child tax credit, and increased the maximum re-fundable child tax credit to $1,400 per qualifying child. The Act also increased the threshold for phase-out of the credit to $400,000 for married individuals filing a joint return ($200,000 for all other taxpayers). In addition, the Act required that a taxpayer claiming the child tax credit must include a SSN for each qualifying child for whom the credit is claimed. This additional requirement does not apply to a non-child dependent for whom the $500 non-refundable credit is claimed. These modifications ap-ply to taxable years beginning after December 31, 2017, and before January 1, 2026.

Increase the alternative minimum tax exemption amount and phase-out thresholds.—An alternative minimum tax (AMT) is imposed on an individual, estate, or trust in an amount by which the tentative minimum tax exceeds the regular income tax for the taxable year. If a taxpayer owes more under the AMT calculation than under the regular income tax calculation, the taxpayer must pay the higher amount. A certain amount of in-come is exempt from the AMT – the so-called “exemption amount.” The Act increased the AMT exemption amounts in 2018 to $109,400 for married taxpayers filling a joint return and $70,300 for single filers for taxable years be-ginning after December 31, 2017, and before January 1, 2026. It also increased the threshold at which this ex-emption amount is phased out to $1 million for married joint filers and $500,000 for single filers for taxable years beginning after December 31, 2017, and before January 1, 2026. Those amounts are indexed for inflation.

Reduce the threshold for medical expense deduc-tion.—Current law allows for an itemized deduction for


unreimbursed medical expenses in excess of 10 percent of a taxpayer’s AGI. The Act reduced this floor to 7.5 percent for taxable years beginning after December 31, 2016, and ending before January 1, 2019. The Act made a similar change in calculating the deduction for these expenses under the AMT.

Decrease the mortgage interest deduction limita-tions.—Prior law allowed for a deduction for interest on certain home mortgages, limited to interest on the first million dollars of debt used for acquiring, constructing, or substantially improving the residence. Prior law also al-lowed the deduction of interest on up to $100,000 of home equity indebtedness. The Act reduced the limitation to in-terest on up to $750,000 of acquisition indebtedness and eliminating the deduction for interest on home equity in-debtedness for taxable years beginning after December 31, 2017, and before January 1, 2026. In the case of acqui-sition indebtedness incurred before December 15, 2017, this limitation remains $1,000,000.

Limit State and local tax deduction.—Current law allows for an itemized deduction for State and local income taxes (or, at the taxpayer’s election, State and lo-cal sales taxes) and property taxes. The Act limited the itemized deduction for State and local taxes to $10,000 for taxable years beginning after December 31, 2017, and before January 1, 2026.

Repeal of deductions and exclusions for moving expenses.—Prior law allowed above-the-line deduc-tions for moving expenses paid by an employee and an exclusion from income for moving expenses reimbursed by an employer. The Act repealed the moving expense deduction and the exclusion of employer-reimbursed moving expense for taxpayers other than members of the Armed Forces, effective for taxable years beginning after December 31, 2017, and before January 1, 2026.

Repeal of deductions for alimony payments.—Prior law allowed above-the-line deductions for payments of alimony and provided that receipt of alimony payments be included as income. Child support payments were not treated as alimony. The Act repealed the alimony deduction and the corresponding inclusion of alimony as income, effective for any divorce or separation instrument executed after December 31, 2018.

Repeal of deduction for personal casualty and theft losses.—Prior law allowed a deduction for any uncompensated loss sustained during the taxable year, provided that the loss was incurred in a business or other profit-seeking activity or arose from theft and certain oth-er casualties. Losses were deductible only above a $100 threshold, and only to the extent that aggregate losses ex-ceeded 10 percent of the taxpayer’s AGI. The Act limited the deduction to losses attributable to a Presidentially-declared disaster declared under section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, effective for losses incurred after December 31, 2017, and before January 1, 2026.

Repeal itemized deductions subject to two per-cent floor.—Prior law allowed itemized deductions for a number of miscellaneous expenses, as long as the total of those expenses exceeded two percent of the taxpayer’s

AGI. Allowable expenses included certain expenses in the production or collection of income, tax preparation ex-penses, and unreimbursed employee expenses. The Act suspended those itemized deductions subject to the two percent floor for taxable years beginning after December 31, 2017, and before January 1, 2026.

Increase percentage limit for cash contributions to public charities.—Current law limits the deduction of cash contributions to public charities and certain other organizations to 50 percent of the taxpayer’s contribution base, generally AGI. The Act increases the limit to 60 per-cent for taxable years beginning after December 31, 2017, and before January 1, 2026.

Repeal limitation on itemized deductions.—Prior law limited the total amount of most otherwise allowable itemized deductions (other than the deductions for medi-cal expenses, investment interest and casualty, theft or gambling losses) for taxpayers with incomes above certain thresholds. For 2017, the threshold amounts are $261,500 for single taxpayers; $287,650 for heads of household; $313,800 for married couples filing jointly; and $156,900 for married taxpayers filing separately. The Act repealed the limitation on itemized deductions for taxable years beginning after December 31, 2017, and before January 1, 2026.

Allow deduction for certain pass-through in-come.—Under current law, businesses such as sole proprietorships, partnerships, limited liability companies, and S corporations, are considered to be “pass-through” entities. Pass-through businesses are generally not treat-ed as taxable entities for income tax purposes, but rather income and expenses are passed through to their own-ers. Income earned by a pass-through entity (whether distributed or not) is taxed to the owners at their own tax rates along with income they may receive from other sources. The Act allows an individual taxpayer to deduct 20 percent of domestic qualified business income from a partnership, S corporation, or sole proprietorship, sub-ject to certain limitations. This provision is effective for tax years beginning after December 31, 2018, through December 31, 2025.

Disallow active pass-through losses in excess of threshold.—Under prior law, active owners of pass-through businesses may use business losses to offset other ordinary income (e.g., wage income) without limit. The Act prohibits taxpayers’ use of pass-through losses in excess of certain threshold amounts. Any excess losses that are disallowed are carried forward and can be used to offset future income, subject to limitations. For 2018, the thresholds are $500,000 for married couples filing jointly and $250,000 for all other individuals. This provision is effective for tax years beginning after December 31, 2017, through December 31, 2025.

Business tax reform

Eliminate the corporate income tax graduat-ed rate structure and decrease the corporate tax rate.—Previously, corporate taxable income was subject to tax under a four-step graduated rate structure. The top corporate tax rate was 35 percent on taxable income


in excess of $10 million. An additional five-percent tax was imposed on a corporation’s taxable income in excess of $100,000, with the maximum additional tax at $11,750. A second additional three-percent tax was imposed on a corporation’s taxable income in excess of $15 million. The maximum second additional tax was $100,000. The Act permanently applies a single rate of 21 percent to corpo-ration taxable income, effective for tax years beginning after December 31, 2017.

Repeal the corporate AMT.—Previously, an AMT was imposed on a corporation to the extent the corpora-tion’s tentative minimum tax exceeded its regular tax. This tentative minimum tax was computed at the rate of 20 percent on the income covered by the AMT in excess of a $40,000 exemption amount subject to a phase-out. The income taxed under the AMT was the corporation’s regu-lar taxable income increased by certain preference items and adjustments. If a corporation was subject to AMT in any year, the amount of AMT is allowed as an AMT credit in any subsequent taxable year to the extent the corporation’s regular tax liability exceeded its tentative minimum tax in the subsequent year. The Act repealed the corporate AMT and allowed AMT credits to offset reg-ular tax liability, effective for tax years beginning after December 31, 2017.

Extend, expand, and phase down bonus depre-ciation.—Businesses can generally recover the cost of certain property over a predetermined period of years. Businesses are allowed to take a first-year bonus depre-ciation deduction of an additional 50 percent of the cost of assets acquired and placed into service before January 1, 2020, but may elect not to take this additional deduction with respect to certain property. The 50-percent allow-ance is phased down for property placed in service after December 31, 2017. This Act extends the additional first-year depreciation deduction through December 31, 2026. The 50-percent allowance is increased to 100 percent for property placed in service after September 27, 2017, and before January 1, 2023. The allowance then decreases by 20 percentage points each year before phasing out com-pletely for property placed in service after December 31, 2026.

Limit net interest deduction to 30 percent of ad-justed taxable income.—Previously, interest paid or accrued by a business generally was deductible in the computation of taxable income subject to a number of limitations. The Act generally limits the deduction to 30 percent of the adjusted taxable income of the business, but with an exception for certain small businesses. Adjusted taxable income is not reduced for depreciation, amortiza-tion, or depletion deductions for taxable years beginning after December 31, 2017, and before January 1, 2022. The excess amount of interest may be carried forward indefi-nitely to future tax years.

Modify net operating loss deduction.—A net oper-ating loss (NOL) generally means the amount by which the deductions of a business exceed its gross income. Previously, a NOL could be carried back two years and carried forward over 20 years to offset taxable income in such years. The Act limits NOL deductions to 80 percent

of taxable income and repeals the ability to carry back NOLs two years, with exceptions for certain businesses. This limitation applies to corporations as well as individ-uals with pass-through businesses.

Amortize research and experimentation expen-ditures.—Under current law, businesses may choose to deduct certain research or experimentation expenditures from current income, or to capitalize these expenditures and deduct them over a longer period. The Act requires that these expenditures paid or incurred in taxable years beginning after December 31, 2021, be capitalized and amortized ratably over a five-year period. Certain expenditures which are attributable to research that is conducted outside of the United States are required to be capitalized and amortized ratably over a period of 15 years.

Repeal or limit business-related deductions.—The Act permanently repeals or limits a number of deduc-tions from business income, including eliminating the deduction for income attributable to domestic production activities and limiting the deduction for employee meal, entertainment, and transportation expenses.

International tax reform

Allow deduction of dividends received by domestic corporations from certain foreign corporations.—The Act provides that in the case of any dividend received from a specified 10-percent owned foreign corporation by a domestic corporation which is a United States sharehold-er with respect to such foreign corporation, a deduction is allowed in an amount equal to the foreign-source portion of such dividend.

Treat deferred foreign income at two-tier rate.—The Act requires that, for the last taxable year of a foreign corporation beginning before January 1, 2018, all U.S. shareholders of any controlled foreign corporation or oth-er foreign corporation (CFC) that is at least 10-percent U.S.-owned but not controlled, include in income their pro rata shares of the accumulated post–1986 deferred for-eign income that was not previously taxed. A portion of that pro rata share of deferred foreign income is deduct-ible resulting in a reduced rate of tax of 15.5 percent for the included deferred foreign income held in liquid form and 8 percent for the remaining deferred foreign income.

Include current year global intangible low-taxed income.—The Act requires that U.S. shareholders of any CFC include in gross income its global intangible low-taxed income (GILTI) in a manner generally similar to inclusions of subpart F income. GILTI means, with respect to any U.S. shareholder for the shareholder’s taxable year, the excess (if any) of the shareholder’s net CFC tested in-come over the shareholder’s net deemed tangible income return. The shareholder’s net deemed tangible income re-turn is an amount equal to 10 percent of the aggregate of the shareholder’s pro rata share of the qualified business asset investment of each CFC with respect to which it is a U.S. shareholder. Domestic C corporations that are U.S. shareholders of CFCs are given a deduction equal to 50 percent (decreasing to 37.5 percent in 2026) of the GILTI. This results in a pre-credit U.S. effective tax rate on GILTI


income of 10.5 percent for 2018 through 2025, and 13.125 percent from 2026 onward. Foreign taxes paid that are at-tributable to the excess return are creditable against the U.S. tax on GILTI, subject to a 20 percent reduction.

Establish deduction for foreign-derived intangi-ble income.—The Act provides a deduction for domestic corporations based on their foreign-derived intangible income (FDII). FDII is the portion of a domestic corpo-ration’s “intangible” income, determined on a formulaic basis, attributable to serving foreign markets. For tax-able years beginning after December 31, 2017, and before January 1, 2026, the provision generally allows a deduc-tion equal to 37.5 percent of the corporation’s FDII. This deduction reduces the effective tax rate on FDII below the statutory corporate tax rate of 21 percent; for example, the deduction implies a 13.125 percent effective tax rate for FDII in these years. For taxable years beginning after December 31, 2025, the deduction for FDII is reduced to 21.875 percent.

Impose a base erosion and anti-abuse tax.—The Act requires that certain taxpayers compute an alter-native minimum tax called the base erosion anti-abuse tax (BEAT). The BEAT is imposed on both domestic and foreign companies with more than $500 million in aver-age annual gross receipts and “base erosion payments” greater than 3 percent of total deductions (2 percent in the case of banks). Base erosion payments are non-cost of goods sold deductible payments made to foreign related

parties. The BEAT is computed as the amount by which a company’s taxable income computed without regard to base erosion payments exceeds the company’s regular cor-porate tax liability minus certain tax credits. The BEAT rate is 5 percent in 2018, rising to 10 percent in 2019 through 2025, and then to 12.5 percent starting in 2026. Banks are subject to a BEAT rate that is 1 percent higher that applies if the base erosion payments exceed 2 percent of total deductions, but certain payments made with re-spect to derivatives are excluded from the BEAT.

Other

Permanently repeal the individual mandate tax penalty.—Under the Patient Protection and Affordable Care Act (Public Law 111–148), individuals are required to be covered by a health plan that provides at least min-imum essential coverage or be subject to a tax penalty for failure to maintain the coverage (commonly referred to as the “individual mandate”). The tax is imposed for any month that the individual does not have the mini-mum essential coverage and is equal to the greater of a flat dollar amount or a percentage of income in excess of the filing threshold. This Act permanently repeals the individual mandate tax penalty by decreasing both the individual annual dollar amount and the percentage of income to zero for health coverage in months beginning after December 31, 2018.

ADJUSTMENTS TO THE BALANCED BUDGET AND EMERGENCY DEFICIT CONTROL ACT (BBEDCA) BASELINE

An important step in addressing the Nation’s fiscal problems is to be upfront about them and to establish a baseline that provides a realistic measure of the deficit outlook before new policies are enacted. This Budget does so by adjusting the BBEDCA baseline to reflect the true cost of extending major tax policies that are scheduled to expire but that are likely to be extended. The BBEDCA

baseline, which is commonly used in budgeting and is defined in statute, reflects, with some exceptions, the pro-jected receipts level under current law.

However, current law includes a number of scheduled tax changes that the Administration believes are unlikely to occur and that prevent it from serving as a realistic benchmark for judging the effect of new legislation. These

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2019–2023 2019–2028

BBEDCA baseline receipts ............................. 3,340.5 3,424.3 3,613.3 3,832.9 4,094.7 4,388.9 4,677.8 4,947.7 5,346.1 5,716.9 6,040.3 19,354.1 46,082.9

Adjustments to BBEDCA baseline:Extend individual income tax provisions 1 �� –112�7 –194�9 –204�7 �� –512�4Extend estate and gift tax provisions �� –14�2 –15�1 �� –29�2

Total, adjustments to BBEDCA baseline ............................................. ......... ......... ......... ......... ......... ......... ......... ......... –112.7 –209.1 –219.8 ......... –541.6

Adjusted baseline receipts ............................. 3,340.5 3,424.3 3,613.3 3,832.9 4,094.7 4,388.9 4,677.8 4,947.7 5,233.5 5,507.8 5,820.5 19,354.1 45,541.41 This provision affects both receipts and outlays� Only the receipt effect is shown here� The outlay effects are listed below:

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2019–23 2019–28

Extend individual income tax provisions �� –3�9 15�3 15�9 �� 27�3Total, outlay effects of adjustments to

BBEDCA baseline �� –3�9 15�3 15�9 �� 27�3

Table 11–2. ADJUSTMENTS TO THE BALANCED BUDGET AND EMERGENCY DEFICIT CONTROL ACT (BBEDCA) BASELINE ESTIMATES OF GOVERNMENTAL RECEIPTS

(In billions of dollars)


tax changes include expiration in 2025 of the individual income and estate and gift tax provisions enacted in the Tax Cuts and Jobs Act. This Budget uses an adjusted baseline that is intended to be more realistic by extending those expiring provisions. This baseline does not reflect the President’s policy proposals, but is rather a realistic and fair benchmark from which to measure the effects of those policies.

Extend individual income tax provisions.—The Administration’s adjusted baseline projection permanent-ly extends all expiring individual income tax provisions in the Tax Cuts and Jobs Act that are currently set to expire on December 31, 2025.

Extend estate and gift tax provisions.—The Administration’s adjusted baseline projection reflects permanent extension of the estate and gift tax parame-ters and provisions in effect for calendar year 2025.

BUDGET PROPOSALS

The 2019 Budget supports the extension of the indi-vidual and estate tax provisions of the Tax Cuts and Jobs Act beyond their expiration in 2025, as described above, to provide certainty for taxpayers and support continued economic growth. The Budget’s additional proposals af-fecting governmental receipts are as follows:

Allow Medicare beneficiaries to contribute to Health Savings Accounts (HSAs) and Medical Savings Accounts (MSAs).—Under current law, workers who are entitled to Medicare are not allowed to contrib-ute to an HSA, even if they are working and are enrolled in a qualifying health plan through their employer. The Administration proposes to allow workers aged 65 or old-er who have a high-deductible health plan through their employer to contribute to an HSA, even if they are enti-tled to Medicare. In addition, the Administration proposes to allow beneficiaries enrolled in Medicare MSA Plans to contribute to their MSAs, beginning in 2021, subject to the annual HSA contribution limits as determined by the Internal Revenue Service. Beneficiaries would also be al-lowed a one-time opportunity to roll over the funds from their private HSAs to their Medicare MSAs. Beneficiaries who elect this plan option would not be allowed to pur-chase Medigap or other supplemental insurance.

Extend Children’s Health Insurance Program (CHIP) funding through 2019.—The Administration proposes to extend CHIP funding through fiscal year 2019. As a result, on net, more children will be enrolled in CHIP and fewer children will be enrolled in Marketplace qualified health plans and employment-based health insurance. This will increase tax revenues and reduce outlays associated with the premium tax credit.

Reform medical liability.—The Administration proposes to reform medical liability beginning in 2019. This proposal has the potential to lower health insurance premiums, increasing taxable income and payroll tax receipts.

Reduce the grace period for Exchange premi-ums.—The Administration proposes to reduce the 90-day grace period for individuals on Exchange plans to repay any missed premium payments to 30 days. The proposal would decrease premium tax credit outlays and increase governmental receipts.

Provide tax exemption for Indian Health Service (IHS) Health Professions scholarship and loan re-payment programs in return for obligatory service requirement.—The Administration proposes to allow scholarship funds for qualified tuition and related expens-

es received under the IHS Health Professions scholarship to be excluded from income. The Administration also proposes to allow students to exclude from gross in-come student loan amounts forgiven by the IHS Loan Repayment Program. Under current law, National Health Service Corps programs and Armed Forces Health Professions Scholarships are provided an exception to the general rule that scholarship amounts representing payment for work are considered ordinary income and therefore taxable. Furthermore, certain loans forgiven as part of certain State and profession-based loan programs are provided an exception from the general rule that loan amounts paid on another’s behalf are taxable income. Extending the exceptions to IHS programs would provide the IHS programs with comparable treatment to similar programs administered by the National Health Service Corps, the Armed Forces, and certain State programs. Eliminating the current tax burden on scholarship recipi-ents would allow IHS to leverage another tool to bolster its ongoing efforts to recruit and retain qualified health-care providers.

Establish Electronic Visa Update System (EVUS) user fee.—The Administration proposes to establish a user fee for EVUS, a new U.S. Customs and Border Protection (CBP) program to collect biographic and trav-el-related information from certain non-immigrant visa holders prior to traveling to the United States. The user fee would fund the costs of establishing, providing, and administering the system.

Eliminate Corporation for Travel Promotion.—The Administration proposes to eliminate funding for the Corporation for Travel Promotion (also known as Brand USA). The Budget extents the authorization for the Electronic System for Travel Authorization (ESTA) surcharge currently deposited in the Travel Promotion Fund and redirects the surcharge to the ESTA account at Customs and Border Protection with a portion to be transferred to the International Trade Administration to administer the Survey of International Air Travelers.

Establish an immigration services surcharge.—The Administration proposes to add a 10 percent surcharge on all requests received by U.S. Citizenship and Immigration Services, including applications for citizen-ship, adjustment of status, and petitions for temporary workers.

Increase worksite enforcement penalties.—The Administration proposes to increase by 35 percent all pen-alty amounts against employers who violate Immigration


and Nationality Act provisions on the unlawful employ-ment of aliens.

Reinstate the Oil Spill Liability Trust Fund excise tax.—The Administration proposes to reinstate the Oil Spill Liability Trust Fund excise tax, which expired on December 31, 2017. The Trust Fund provides resources for the Federal Government to respond and clean up inci-dents of oil spills.

Provide paid parental leave benefits.—The Administration proposes establishing a new benefit with-in the Unemployment Insurance (UI) program to provide up to six weeks paid leave to mothers, fathers, and adop-tive parents. States are responsible for adjusting their UI tax structures to maintain sufficient balances in their Unemployment Trust Fund accounts.

Establish Unemployment Insurance (UI) solvency standard.—The Administration proposes to set a mini-mum solvency standard to encourage States to maintain sufficient balances in their UI trust funds. States that are currently below this minimum standard are expected to increase their State UI taxes to build up their trust fund balances. States that do not build up sufficient reserves will be subject to Federal Unemployment Tax Act credit reductions, increasing Federal UI receipts.

Improve UI Insurance program integrity.—The Administration proposes a package of reforms to the UI program aimed at improving program integrity. These re-forms are expected to reduce outlays in the UI program by reducing improper payments. In general, reduced outlays allow States to keep UI taxes lower, reducing overall re-ceipts to the UI trust funds.

Provide for Reemployment Services and Eligibility Assessments (RESEAs).—The Administration proposes mandatory funding to provide RESEAs to the one-half of UI claimants identified as most likely to exhaust benefits. RESEAs have been shown to reduce improper payments and to get claimants back to work more quickly, thereby reducing UI benefit outlays. In general, reduced outlays allow States to keep UI taxes lower, reducing overall re-ceipts to the UI trust funds.

Reform the Essential Air Service (EAS).—The Administration proposes to reform the EAS by reducing discretionary funding and focusing on the remote airports that are most in need of subsidized commercial air service. The proposal will include a mix of reforms, including lim-its on per-passenger subsidies and higher average daily enplanements. These reforms would affect governmental receipts by reducing aviation overflight fees.

Enact Federal Aviation Administration (FAA) air traffic control reform.—The Administration proposes to shift the FAA’s air traffic control function into a non-governmental entity beginning in 2022. This proposal would reduce the collection of aviation excise taxes. The estimates in the Budget are illustrative of the aviation taxes that would be in place to fund the FAA’s Airport Improvement Program.

Provide authority to purchase and construct a new Bureau of Engraving and Printing facility.—The Administration proposes to provide authority to the Bureau of Engraving and Printing to construct a more

efficient production facility. This will reduce the cost in-curred by the Federal Reserve for printing currency and therefore increase governmental receipts via increased deposits from the Federal Reserve to Treasury.

Subject Financial Research Fund (FRF) to ap-propriations with reforms to the Financial Stability Oversight Council (FSOC) and Office of Financial Research (OFR).—Expenses of the FSOC and OFR are paid through the FRF, which is funded by assessments on certain bank holding companies with total consolidated assets of $50 billion or greater and nonbank financial companies supervised by the Federal Reserve Board of Governors. The FRF was established by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Public Law 111–203) and is managed by the Department of the Treasury. To improve their effectiveness and ensure great-er accountability, the Budget proposes to subject activities of the FSOC and OFR to the annual appropriations pro-cess. In so doing, currently authorized assessments would, beginning in fiscal year 2020, be reauthorized as discre-tionary offsetting collections and set at a level determined by the Congress. The Budget also reflects continued reductions in OFR spending commensurate with the re-newed fiscal discipline being applied across the Federal Government.

Provide discretionary funding for Internal Revenue Service (IRS) program integrity cap ad-justment.—The Administration proposes to establish and fund a new adjustment to the discretionary caps for IRS program integrity activities starting in 2019. The IRS base funding within the discretionary caps funds current tax administration activities, including all tax enforcement and compliance program activities, in the Enforcement and Operations Support accounts at IRS. The additional $362 million cap adjustment in 2019 will fund new and continuing investments in expanding and improving the effectiveness and efficiency of the IRS’s tax enforcement program. The activities are estimated to gen-erate $44 billion in additional revenue over 10 years and cost approximately $15 billion, resulting in an estimated net savings of $29 billion. Once the new staff are trained and become fully operational these initiatives are expect-ed to generate roughly $4 in additional revenue for every $1 in IRS expenses. Notably, the return on investment is likely understated because it only includes amounts re-ceived; it does not reflect the effect enhanced enforcement has on deterring noncompliance. This indirect deterrence helps to ensure the continued payment of over $3 tril-lion in taxes paid each year without direct enforcement measures.

Increase oversight of paid tax return preparers.—Paid tax return preparers have an important role in tax administration because they assist taxpayers in comply-ing with their obligations under the tax laws. Incompetent and dishonest tax return preparers increase collection costs, reduce revenues, disadvantage taxpayers by poten-tially subjecting them to penalties and interest as a result of incorrect returns, and undermine confidence in the tax system. To promote high quality services from paid tax return preparers, the proposal would explicitly provide


that the Secretary of the Treasury has the authority to regulate all paid tax return preparers.

Provide the IRS with greater flexibility to address correctable errors.—The Administration proposes to expand IRS authority to correct errors on taxpayer re-turns. Current statute only allows the IRS to correct errors on returns in certain limited instances, such as ba-sic math errors or the failure to include the appropriate social security number or taxpayer identification num-ber. This proposal would expand the instances in which the IRS could correct a taxpayer’s return including cases where: (1) the information provided by the taxpayer does not match the information contained in Government da-tabases; (2) the taxpayer has exceeded the lifetime limit for claiming a deduction or credit; or (3) the taxpayer has

failed to include with his or her return, certain documen-tation that is required by statute. The proposal would be effective on the date of enactment.

Reform inland waterways financing.—The Administration proposes to reform the laws governing the Inland Waterways Trust Fund, including establishing a fee to increase the amount paid by commercial naviga-tion users of the inland waterways. In 1986, the Congress provided that commercial traffic on the inland waterways would be responsible for 50 percent of the capital costs of the locks, dams, and other features that make barge transportation possible on the inland waterways. The ad-ditional revenue would help finance the users’ share of future capital investments as well as 10 percent of the cost of operation and maintenance activities in these wa-

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 20282019-2023

2019-2028

Allow Medicare beneficiaries to contribute to Health Savings Accounts (HSAs) and Medical Savings Accounts (MSAs) �� –610 –1,071 –1,285 –1,493 –1,599 –1,674 –1,746 –1,807 –2,966 –11,285

Extend Children’s Health Insurance Program (CHIP) funding through 2019 �� 388 58 �� 446 446

Reform medical liability �� 24 222 548 987 1,476 2,067 2,687 3,079 3,290 3,475 3,257 17,855Reduce the grace period for Exchange premiums �� 164 55 �� 219 219Provide tax exemption for Indian Health Service (IHS) Health

Professions scholarship and loan repayment programs in return for obligatory service requirement �� –5 –12 –13 –14 –14 –14 –14 –15 –17 –19 –58 –137

Establish Electronic Visa Update System (EVUS) user fee �� 25 28 31 34 38 42 46 52 57 64 156 417Eliminate Corporation for Travel Promotion �� 171 177 183 189 196 202 209 216 531 1,543Establish an immigration services surcharge �� 453 465 479 493 507 522 538 553 569 587 2,397 5,166Increase worksite enforcement penalties �� 13 14 15 15 15 15 15 15 15 15 72 147Reauthorize the Oil Spill Liability Trust Fund excise tax 1 �� 354 466 473 480 489 494 500 507 511 511 2,262 4,785Provide paid parental leave benefits 1 �� 962 971 1,001 1,194 1,300 1,401 1,495 1,933 8,324Establish an Unemployment Insurance (UI) solvency standard 1 �� 633 1,615 2,230 919 1,613 927 1,267 1,907 4,478 11,111Improve UI program integrity 1 �� –1 –9 –21 –72 –66 –98 –69 –127 –105 –103 –568Provide for Reemployment Services and Eligibility Assessments

(RESEAs) 1 �� –3 –14 –69 –125 –128 –199 –307 –287 –469 –211 –1,601Reform the Essential Air Service (EAS) �� –152 156 –160 –164 –168 –172 –177 –308 –1,149Enact Federal Aviation Administration (FAA) air traffic control

reform �� –15,495 –16,241 –17,027 –17,870 –18,674 –19,497 –20,536 –31,736 –125,340Provide authority to purchase and construct a new Bureau of

Engraving and Printing facility �� 12 32 3 –89 360 53 –20 3 222 3 318 579Subject Financial Research Fund (FRF) to appropriations with

reforms to the Financial Stability Oversight Council (FSOC) and Office of Financial Research (OFR) 1 �� 1 –50 –50 –50 –50 –50 –50 –50 –50 –50 –199 –449

Provide discretionary funding for Internal Revenue Service (IRS) program integrity cap adjustment �� 152 787 1,825 3,033 4,330 5,554 6,416 6,931 7,270 7,505 10,127 43,803

Increase oversight of paid tax return preparers �� 17 18 21 23 25 28 31 34 38 41 104 276Provide the IRS with greater flexibility to address correctable

errors �� 7 11 12 12 13 13 14 15 15 16 55 128Reform inland waterways financing �� 178 178 178 178 178 178 178 178 178 178 890 1,780Reduce the Harbor Maintenance Tax 1 �� –265 –281 –292 –299 –307 –314 –323 –333 –345 –359 –1,444 –3,118Increase employee contributions to Federal Employee Retirement

System (FERS) �� 2,267 4,602 6,442 8,068 9,441 9,456 9,470 9,480 9,479 21,379 68,705Eliminate allocations to the Housing Trust Fund and Capital

Magnet Fund �� 62 74 73 78 82 84 85 87 89 90 369 804Improve clarity in worker classification and information reporting

requirements �� –100 –100 100 �� 100 105 �� 205Repeal and replace Obamacare �� –3,452 –8,617 –2,503 –2,829 –2,883 –2,959 –3,192 –3,473 –3,676 –4,092 –20,284 –37,676Offset overlapping unemployment and disability payments 1 �� –3 –6 –7 –14 –18 –25 –29 –31 –16 –133Expand flexibility and broaden eligibility for Private Activity Bonds

(PABs) �� –31 –138 –296 –457 –616 –753 –839 –893 –945 –992 –1,538 –5,960Total, effect of budget proposals �� –100 –2,003 –4,327 5,274 –6,023 –2,791 –2,378 –1,417 –2,328 –2,180 –2,950 –9,870 –21,123

1 Net of income offsets�

Table 11-3. EFFECT OF BUDGET PROPOSALS(In millions of dollars)


terways to support economic growth. The current excise tax on diesel fuel used in inland waterways commerce will not produce sufficient revenue to cover these costs.

Reduce the Harbor Maintenance Tax.—The Administration proposes to reduce the Harbor Maintenance Tax rate to better align estimated annual receipts from this tax with recent appropriation levels for eligible expenditures from the Harbor Maintenance Trust Fund. Reducing this tax would provide greater flexibility for individual ports to establish appropriate fee struc-tures for services they provide, in order to help finance their capital and operating expenses on their own.

Increase employee contributions to Federal Employee Retirement System (FERS).—The Administration proposes to increase Federal employee contributions to FERS, equalizing employee and em-ployer contributions to FERS so that half of the normal cost would be paid by each. For some specific occupations, such as law enforcement officers and firefighters, the cost of their retirement package necessitates a higher nor-mal cost percentage. For those specific occupations, this proposal would increase but not equalize employee contri-butions. This proposal brings Federal retirement benefits more in line with the private sector. This adjustment will reduce the long term cost to the Federal Government by reducing the Government’s contribution rate. To lessen the impact on employees this proposal will be phased in, increasing employee contributions by one percentage point per year until equalized.

Eliminate allocations to the Housing Trust Fund and Capital Magnet Fund.—The Administration pro-poses to eliminate an assessment on Fannie Mae and Freddie Mac that is used to fund the Housing Trust Fund and Capital Magnet Fund, two Federal programs that support affordable low-income housing. The resulting in-crease in taxable income at Fannie Mae and Freddie Mac would impact governmental receipts.

Improve clarity in worker classification and infor-mation reporting requirements.—The Administration proposes to: (1) establish a new safe harbor that allows

a service recipient to classify a service provider as an independent contractor and requires withholding of indi-vidual income taxes to this independent contractor at a rate of five percent on the first $20,000 of payments; and (2) raises the reporting threshold for payments to all in-dependent contractors from $600 to $1,000, and reduces the reporting threshold for third-party settlement orga-nizations from $20,000 and 200 transactions per payee to $1,000 without regard to the number of transactions. The proposal increases clarity in the tax code, reduces costly litigation, and raises revenue.

Repeal and replace Obamacare.—The Administration is committed to rescuing Americans from the failures of Obamacare. Repealing and replacing Obamacare would affect governmental receipts by repeal-ing the Premium Tax Credit, the medical device tax, and the HSA tax, and making various other reforms to HSAs.

Offset overlapping unemployment and disabil-ity payments.—The Administration proposes to close a loophole that allows individuals to receive both UI and Disability Insurance (DI) benefits for the same period of joblessness. The proposal would offset the DI benefit to account for concurrent receipt of UI benefits. Offsetting the overlapping benefits would discourage some indi-viduals from applying for UI, reducing benefit outlays. The reduction in benefit outlays is accompanied by a re-duction in States’ UI tax receipts, which are held in the Unemployment Trust Fund.

Expand flexibility and broaden eligibility for private activity bonds (PABs).—As part of the Administration’s infrastructure initiative, the Budget proposes to expand flexibility and broaden eligibility for private activity bonds. PABs eligible to finance this broadened definition of “core public infrastructure proj-ects” would not be subject to State volume caps. However, the projects must be either Government-owned or pri-vately-owned but subject to Government regulatory or contractual control and approval such that the facilities are available to the public.


Source 2017Actual

Estimate

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Individual income taxes:Federal funds �� 1,587,120 1,660,063 1,687,042 1,789,704 1,917,184 2,050,498 2,197,899 2,347,934 2,504,331 2,700,016 2,882,828 3,062,139

Legislative proposal, not subject to PAYGO �� –14 –29 –65 –175 –206 –129 –175 –134 –156 –188

Legislative proposal, subject to PAYGO �� 718 947 1,592 2,626 3,968 5,316 6,428 7,120 7,516 7,797

Total, Individual income taxes .................. 1,587,120 1,660,063 1,687,746 1,790,622 1,918,711 2,052,949 2,201,661 2,353,121 2,510,584 2,707,002 2,890,188 3,069,748

Corporation income taxes:Federal funds �� 297,048 217,648 225,295 264,710 272,706 314,208 373,856 416,627 434,764 417,498 406,137 413,564

Legislative proposal, not subject to PAYGO �� –3 10 10 11 11 10 11 11 11 12

Legislative proposal, subject to PAYGO �� 52 40 7 –21 –48 –71 –85 –94 –102 –110

Total, Corporation income taxes .............. 297,048 217,648 225,344 264,760 272,723 314,198 373,819 416,566 434,690 417,415 406,046 413,466

Social insurance and retirement receipts (trust funds):Employment and general retirement:

Old-age survivors insurance (off-budget) �� 688,048 689,294 762,821 804,675 850,279 897,037 942,951 995,275 1,048,234 1,107,760 1,163,400 1,232,525Legislative proposal, not subject

to PAYGO �� –8 –15 –95 –343 –411 –240 –344 –256 –307 –382Legislative proposal, subject to

PAYGO �� –43 –80 58 –113 –97 –30 68 194 174 290 311Disability insurance (off-budget) �� 162,570 163,035 142,464 136,643 144,388 152,328 160,123 169,009 178,003 188,111 197,558 209,296

Legislative proposal, not subject to PAYGO �� –1 –2 –16 –58 –70 –41 –58 –43 –52 –65

Legislative proposal, subject to PAYGO �� –7 –14 10 –19 –17 –5 12 33 30 49 53

Hospital Insurance �� 255,930 259,138 275,214 286,994 304,251 321,942 339,409 358,896 378,617 400,703 421,734 447,540Legislative proposal, not subject

to PAYGO �� –2 –4 –26 –94 –113 –66 –93 –70 –84 –104Legislative proposal, subject to

PAYGO �� –50 2 120 93 100 126 161 211 334 341 363Railroad retirement:

Social security equivalent account �� 2,213 2,365 2,472 2,536 2,627 2,728 2,835 2,943 3,053 3,167 3,276 3,382Rail pension & supplemental annuity 3,136 3,187 3,253 3,349 3,464 3,596 3,734 3,876 4,021 4,171 4,512 4,708

Total, Employment and general retirement �� 1,111,897 1,116,919 1,186,121 1,234,364 1,304,833 1,377,122 1,448,549 1,529,893 1,611,871 1,704,081 1,790,717 1,897,627On-budget �� (261,279) (264,640) (280,939) (292,995) (310,409) (328,272) (345,991) (365,810) (385,809) (408,305) (429,779) (455,889)Off-budget �� (850,618) (852,279) (905,182) (941,369) (994,424) (1,048,850) (1,102,558) (1,164,083) (1,226,062) (1,295,776) (1,360,938) (1,441,738)

Unemployment insurance:Deposits by States 1 �� 37,551 39,118 39,993 39,936 40,218 39,367 39,907 40,719 41,611 42,983 44,549 47,582

Legislative proposal, not subject to PAYGO �� –4 –27 –110 –238 –235 –361 –460 –504 –699

Legislative proposal, subject to PAYGO �� –4 1,591 2,172 1,741 2,374 1,950 1,979 2,116

Federal unemployment receipts 1 �� 8,131 8,811 6,383 6,503 6,629 6,760 6,892 7,037 7,187 7,339 7,499 7,669Legislative proposal, subject to

PAYGO �� 791 1,621 1,814 633 1,100 791 1,305 2,078Railroad unemployment receipts 1 �� 126 135 140 146 141 119 116 138 145 138 138 151

Total, Unemployment insurance �� 45,808 48,064 46,516 46,581 47,748 49,348 50,663 50,033 52,056 52,741 54,966 58,897Other retirement:

Federal employees retirement- employee share �� 4,158 4,681 4,952 5,258 5,623 6,011 6,421 6,850 7,294 7,754 8,233 8,701Legislative proposal, subject to

PAYGO �� 2,267 4,602 6,442 8,068 9,441 9,456 9,470 9,480 9,479Non-Federal employees retirement 2 �� 34 37 39 39 38 38 38 38 38 37 37 37

Total, Other retirement �� 4,192 4,718 4,991 7,564 10,263 12,491 14,527 16,329 16,788 17,261 17,750 18,217Total, Social insurance and retirement

receipts (trust funds) ............................ 1,161,897 1,169,701 1,237,628 1,288,509 1,362,844 1,438,961 1,513,739 1,596,255 1,680,715 1,774,083 1,863,433 1,974,741On-budget �� (311,279) (317,422) (332,446) (347,140) (368,420) (390,111) (411,181) (432,172) (454,653) (478,307) (502,495) (533,003)

Table 11–4. RECEIPTS BY SOURCE(In millions of dollars)


Table 11–4. RECEIPTS BY SOURCE—Continued(In millions of dollars)

Source 2017Actual

Estimate

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Off-budget �� (850,618) (852,279) (905,182) (941,369) (994,424) (1,048,850) (1,102,558) (1,164,083) (1,226,062) (1,295,776) (1,360,938) (1,441,738)

Excise taxes:Federal funds:

Alcohol �� 9,924 10,208 10,377 10,466 10,576 10,683 10,726 10,833 10,893 10,978 11,183 11,515Tobacco �� 13,804 13,669 13,534 13,398 13,263 13,128 12,993 12,857 12,722 12,587 12,451 12,316Transportation fuels �� –3,400 –947 –998 –1,010 –1,013 –1,014 –1,014 –1,016 –1,015 –1,014 –1,015 –1,014Telephone and teletype services �� 558 510 463 413 361 308 254 199 143 86 44 23High-cost health insurance coverage �� 1,714 5,981 6,919 8,000 9,249 10,671 12,238 14,044 16,105Health insurance providers �� 68 14,281 15,026 15,684 16,480 17,374 18,225 19,161 20,149 21,170 22,253 23,391Indoor tanning services �� 70 68 67 65 63 61 59 57 55 53 51 49Medical devices �� –202 1,572 2,309 2,489 2,640 2,823 2,992 3,178 3,360 3,556 3,761 3,975Other Federal fund excise taxes �� 369 3,159 3,283 3,494 3,635 3,756 3,872 3,995 4,133 4,270 4,418 4,574

Legislative proposal, subject to PAYGO �� –152 –156 –160 –164 –168 –172 –177

Total, Federal funds �� 21,191 42,520 44,061 46,713 51,986 53,886 55,951 58,353 60,947 63,756 67,018 70,757Trust funds:

Transportation �� 41,020 41,812 42,591 43,244 43,619 43,812 43,934 44,030 44,095 44,254 44,568 44,921Airport and airway �� 15,055 15,736 16,538 17,281 18,060 18,845 19,725 20,668 21,678 22,692 23,691 24,915

Legislative proposal, subject to PAYGO �� –15,495 –16,241 –17,027 –17,870 –18,674 –19,497 –20,536

Sport fish restoration and boating safety �� 559 562 565 569 573 577 583 587 592 597 602 611

Tobacco assessments �� 3 �� Black lung disability insurance �� 429 473 290 235 234 229 225 221 217 212 207 201Inland waterway �� 114 105 104 102 101 98 97 95 94 92 91 92Oil spill liability �� 516 137 ��

Legislative proposal, subject to PAYGO �� 465 612 621 630 641 649 657 666 670 670

Vaccine injury compensation �� 270 296 303 308 305 308 312 317 316 319 324 329Leaking underground storage tank �� 225 215 218 218 219 217 214 212 212 210 208 208Supplementary medical insurance �� 4,147 5,997 2,826 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800Patient-centered outcomes research � 294 329 434 366 382 400 418 437 455 475 495 518

Total, Trust funds �� 62,632 65,662 64,334 65,735 66,914 52,421 52,708 52,989 53,246 53,643 54,159 54,729Total, Excise taxes ..................................... 83,823 108,182 108,395 112,448 118,900 106,307 108,659 111,342 114,193 117,399 121,177 125,486

Estate and gift taxes:Federal funds �� 22,768 24,650 16,824 18,042 19,429 20,651 22,848 24,364 26,091 27,635 29,092 30,891

Total, Estate and gift taxes ....................... 22,768 24,650 16,824 18,042 19,429 20,651 22,848 24,364 26,091 27,635 29,092 30,891

Customs duties and fees:Federal funds �� 33,097 38,749 42,368 45,150 46,206 47,932 48,852 49,783 50,933 52,360 54,120 56,147Trust funds:

Trust funds �� 1,477 1,688 1,831 1,943 2,018 2,067 2,118 2,165 2,223 2,292 2,292 2,292Legislative proposal, subject to

PAYGO �� –347 –369 –383 –393 –403 –412 –424 –437 –453 –471Total, Trust funds �� 1,477 1,688 1,484 1,574 1,635 1,674 1,715 1,753 1,799 1,855 1,839 1,821

Total, Customs duties and fees ................ 34,574 40,437 43,852 46,724 47,841 49,606 50,567 51,536 52,732 54,215 55,959 57,968

Miscellaneous receipts:Federal funds:

Miscellaneous taxes �� 593 543 544 598 598 599 599 599 599 600 600 600Deposit of earnings, Federal Reserve

System �� 81,287 72,097 55,102 48,588 52,228 59,130 66,905 72,662 77,280 81,780 86,336 90,854Legislative proposal, subject to

PAYGO �� 159 679 665 588 1,054 763 707 747 983 782Transfers from the Federal Reserve �� 602 575 632 647 662 677 694 710 727 744 761 779

Legislative proposal, subject to PAYGO �� –147 –647 –662 –677 –694 –710 –727 –744 –761 –779

Fees for permits and regulatory and judicial services �� 23,911 22,694 22,053 23,258 24,013 25,392 25,955 27,713 27,978 29,372 30,799 31,952


Table 11–4. RECEIPTS BY SOURCE—Continued(In millions of dollars)

Source 2017Actual

Estimate

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Legislative proposal, subject to PAYGO �� 478 425 613 636 660 685 712 739 767 799

Fines, penalties, and forfeitures �� 20,984 22,266 25,236 20,785 20,193 20,462 20,760 21,084 21,435 21,785 22,035 22,417Legislative proposal, subject to

PAYGO �� 13 14 15 15 15 15 15 15 15 15Refunds and recoveries �� –50 –50 –50 –50 –50 –50 –50 –50 –50 –50 –50 –50

Total, Federal funds �� 127,327 118,125 104,020 94,297 98,275 106,772 115,898 123,471 128,676 134,988 141,485 147,369Trust funds:

United Mine Workers of America, combined benefit fund �� 81 17 16 14 13 12 11 10 9 8 7 7

Defense cooperation �� 375 360 531 697 486 535 232 161 164 167 170 174Inland waterways (Legislative

proposal, subject to PAYGO) �� 178 178 178 178 178 178 178 178 178 178Fines, penalties, and forfeitures �� 1,169 1,177 1,219 1,259 1,300 1,342 1,383 1,424 1,464 1,505 1,545 1,587

Total, Trust funds �� 1,625 1,554 1,944 2,148 1,977 2,067 1,804 1,773 1,815 1,858 1,900 1,946Total, Miscellaneous receipts ................... 128,952 119,679 105,964 96,445 100,252 108,839 117,702 125,244 130,491 136,846 143,385 149,315Allowance for repeal and replacement of

Obamacare ............................................ ......... ......... –3,452 –8,617 –2,503 –2,829 –2,883 –2,959 –3,192 –3,473 –3,676 –4,092Total, budget receipts ................................ 3,316,182 3,340,360 3,422,301 3,608,933 3,838,197 4,088,682 4,386,112 4,675,469 4,946,304 5,231,122 5,505,604 5,817,523

On-budget �� (2,465,564) (2,488,081) (2,517,119) (2,667,564) (2,843,773) (3,039,832) (3,283,554) (3,511,386) (3,720,242) (3,935,346) (4,144,666) (4,375,785)Off-budget �� (850,618) (852,279) (905,182) (941,369) (994,424) (1,048,850) (1,102,558) (1,164,083) (1,226,062) (1,295,776) (1,360,938) (1,441,738)

1 Deposits by States cover the benefit part of the program� Federal unemployment receipts cover administrative costs at both the Federal and State levels� Railroad unemployment receipts cover both the benefits and administrative costs of the program for the railroads�

2 Represents employer and employee contributions to the civil service retirement and disability fund for covered employees of Government-sponsored, privately owned enterprises and the District of Columbia municipal government�

federal receipts - whitehouse.gov burdensome tax system to unleash america’s econ-omy, and create...

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